February Victoria home sales dip, follow national trend

By
ALLISON MILES
March 26, 2013 at 8 p.m.Updated March 26, 2013 at 10:27 p.m.

Victoria experienced a dip in home sales in February, which followed the national trend.

Data from the Victoria Board of Realtors shows 61 homes sold in February, versus 72 the previous February.

But one Victoria Realtor said the drop comes because there aren't enough homes to sell.

With so many people looking to move into the Crossroads, inventory is Victoria's biggest issue, said Veronica McCants, broker and co-owner of Re/Max Land and Homes.

"We have people lined up to look at homes." she said. "It's terrible. Absolutely terrible."

McCants said now is a seller's market, with some buyers offering more than the asking price. The tough part then is assuring the home appraises for that amount.

While the number of sales has dropped, she said, housing prices have increased.

McCants said she hopes to see new housing enter the market as new developers and builders make their way to town. Until then, however, it will likely remain tight.

"People don't really have a choice in where to move to," she said. "Until there are more new homes, I don't think it will get any better."

US home sales and US economy stories, see below

Low interest rates, improving economy draw buyers

WASHINGTON (MCT) – Sales of new U.S. homes fell 4.6 percent in February to mark the biggest drop in two years, the government said Tuesday, though poor weather likely played a big role.

Sales slowed to an annual rate of 411,000 last month from a revised 431,000 in January, which was the fastest pace in more than four years.

The decline in February – a late-winter month often marked by poor weather – was the largest since the same month in 2011. The Northeast, where sales slumped more than 13 percent, was battered by a major snowstorm early in February.

Economists polled by MarketWatch had forecast new-home sales to drop to 417,000 last month on a seasonally adjusted basis.

Sales also fell 9.7 percent in the South and 2.1 percent in the West, the Commerce Department said. The only region to see an increase was the Midwest, where sales climbed 13.7 percent.

Sales nationwide are still 12.3 percent higher, however, compared to one year earlier, and economists expect purchases to accelerate in 2013. Ultra-low interest rates and a gradually improving economy are drawing more buyers into the market, as are rising prices. Some customers want sign contracts before they rise any further.

“Potential home buyers are entering the market now instead of later because they are afraid that prices will shoot up if they wait,” economists at IHS Global Insight wrote in a report.

The median price of new homes, for example, climbed 3 percent to $246,800, the government said. And another report released Tuesday, known as Case-Shiller, showed that prices rose in January at the fastest clip in more than six years, a sign that home buyers are becoming more active.

Even a surprisingly large drop in the consumer confidence index in March probably won’t do much to slow the pace of sales. In an otherwise negative report, some 5.6 percent of consumers said they plan to buy a home within six months compared to 3.8 percent in February.

The supply of new homes available for purchase, meanwhile, rose to 4.4 months at the current sales rate from 4.2 months because of the pause in sales in February.

The number could continue to rise as builders ramp up construction to meet rising demand. Permits to build new single-family homes have increased sharply since last summer, rising to an annual rate of 600,000 in February.

Sales for January were revised down from an initial read of 437,000, based on more complete information collected by the government.

The sale of new homes sank to a modern low of 306,000 in 2011 before rising last year to 367,000. Economists expect sales to reach around 450,000 in 2013, though that is two-thirds below a record 1.28 million in 2005, near the end of a housing bubble.

Housing, manufacturing give US economy lift

WASHINGTON (AP) – Gains in housing and manufacturing propelled the U.S. economy over the winter, according to reports released Tuesday, and analysts say they point to the resilience of consumers and businesses as government spending cuts kick in.

U.S. home prices rose 8.1 percent in January, the fastest annual rate since the peak of the housing boom in the summer of 2006. And demand for longer-lasting factory goods jumped 5.7 percent in February, the biggest increase in five months.

“There is nothing in this data that says the economy is falling back,” said Joel Naroff, chief economist at Naroff Economic Advisors.

A recovery in housing has helped lift the economy this year and is finally restoring some of the wealth lost during the Great Recession.

The year-over-year rise in home prices reported by the Standard & Poor’s/Case Shiller 20-city index was the fastest since June 2006. Prices rose in all 20 cities and eight markets posted double-digit increases, including some of the hardest hit during the crisis. Prices rose 23.2 percent in Phoenix, 17.5 percent in San Francisco and 15.3 percent in Las Vegas.

The strength in home prices has far from erased all the damage from the crisis. Home prices nationwide are still 29 percent below their peak reached in August 2006.

Still, steady gains should encourage more people to buy and put their homes on the market, keeping the recovery going. And higher home prices make people feel wealthier, which leads consumers to spend more and drives more economic growth.

Sales of new homes cooled off in February to a seasonally adjusted annual rate of $411,000. That’s down from January’s pace of $431,000, which was the fastest since September 2008. But February’s pace was still better than every other month since April 2010, when a temporary home-buying tax credit was boosting sales. And sales are 12.3 percent higher than a year ago.

“We are still far from the healthy level of $700,000, but we’re slowly making our way in that direction,” said Jennifer Lee, senior economist with BMO Capital Markets. “We just have to accept the fact that the path will be interrupted once in a while and that’s what happened in February.”

Manufacturing is also boosting the economy this year, and factories were busier in February, according to the Commerce Department report on durable goods orders.

February’s increase was driven by a surge in commercial aircraft orders, which tend to be volatile. Still, orders for motor vehicles and parts increased solidly, suggesting demand for cars and trucks remains strong.